Asian economies will rebound with or without a recovery in the US, helped by an anticipated pickup in Chinese demand that will benefit Taiwan and others in the region, Standard Chartered Group chief economist Gerard Lyons said in Taipei yesterday.
“Asia can experience a boom without the US booming and the US is not going to boom. Therefore, the recovery we are likely to see in Asia is a recovery where growth rates will pick up, but the level will not be the levels seen in the boom years of 2006, 2007 or the early part of 2008,” Lyons said. “The level will be more like those seen in the middle part of this decade.”
Albeit gradual, the recovery in China will directly boost most export-dependent Asian economies and indirectly boost confidence across Asia since half of exports from Taiwan, Malaysia and Singapore are shipped to China while the remainder goes to the West, he said.
Stronger demand in Asia’s economic engines will not be enough to offset the slump in demand from the West, Lyons said, as 60 percent of all Asian exports go to G7 countries. However, correcting the imbalance in global trade — which requires the West to spend less and save more, while Asia and the Middle East need to spend more and save less — will pave the road for a solid recovery in the world economy.
Standard Chartered projected the downturn in the US would bottom out this autumn, while European economies and Japan would bottom out at the end of this year.
China, India and Indonesia have already begun to recover, while most Asian economies — including Taiwan — will see signs of improvement in the fourth quarter, followed by a rebound next year, Lyons said.
The British bank predicted that the US economy would contract 3.5 percent this year, while the EU and Japan’s economies would shrink 4.4 percent and 5.8 percent respectively.
In Asia, China and India are expected to see robust growth this year of 6.8 percent and 5 percent respectively, while Malaysia, Taiwan and Singapore are likely to contract by 3.1 percent, 5 percent and 7.5 percent respectively.
Separately, Lyons said in a speech yesterday at the 11th Joint Meeting of the Taiwan British Business Council that Taiwan’s economic prospects were good and its companies should seize business opportunities in China.
Taiwan, like the UK, is an industrial country that should make the transition to a more service-driven economy by investing in research and development and knowledge-based capabilities, he said.
At the same meeting, David Campbell, director of the British Trade and Cultural Office, also expressed confidence in the country’s economy.
He said improved cross-strait relations had benefited both Taiwanese and British companies and that many British firms had expressed interest in Taiwan.
“This is a very good time for us to be raising the awareness in the UK of the changes and the new opportunities in Taiwan,” Campbell said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure